Month: August 2016

With suit jacket and jeans, tousled hair and an ever-present look that suggests his mind is anywhere but the space that surrounds him, Buckles is a sort of folk hero among Vanderbilt’s Econ majors. And for good reason. His classes are full of the difficult, open-ended questions that get you to think about the heart of the material – almost making you feel like the $30,000 you are paying to attend that semester is justified.

Among the many thought-provoking queries Buckles proposed to my Econ 101 class, one sticks out in particular:

How do we make a correct decision?

It’s one of the most important questions that exist, after all. We make choices throughout the course of our lives. Whether we’re deciding which job to take, city to move, person to date or type of sandwich to make, our choices color the reality we experience.

So how do we make the right choices? Some use logic. Some trust their feelings. Some pray to an old dude in the sky. Buckles offered us a simple answer: “If the benefits of a decision outweigh the costs, you should do it.”

… well yeah. No shit.

It seems obvious once you think about it, but little did I know this answer would linger with me through the rest of my college courses, eventually shaping the way I perceive every thing.

You see, Buckles’ answer signified something deeper, one of the very foundations of the human experience. It’s mysterious. It’s awe-inspiring. And it’s one of the most important things you can ever realize in your quest to become a happier, more empathetic human.

The Two Sides to Every Coin

Our lives consist of moments. We measure their duration with different units – be it a second, an hour, a day or a century.

But through them all, you only experience one thing: this moment. Here. Right now. These words you’re reading. The sounds you’re hearing. They are all that compose your reality.

One of the driving blocks of economic theory, scarcity, originates from this truth.

Because our time is finite and our wants unlimited, we are forced to make a trade-off every time we do something. And since we only exist inside of one moment, we are always making a sacrifice. That sacrifice is every other possible thing we could be doing.

Say you’re sitting on the couch staring at a bag of Cheetos. You’ve been flirting with a diet for the past few days, but the allure of the cheesy goodness is starting to override your willpower, and you consider digging in.

In this situation, two possibilities exist – you eat the Cheetos or you don’t eat the Cheetos. Thus, there are two sides to your moment: the action and its opposite. You choose to do whichever one you think is best for you during that unit of time.

But this logic doesn’t just apply to Cheetos. The deeper you look, the more you realize that everything in the universe has these two sides. Light and Dark. Good and Evil. Life and Death. Benefits and Costs.

We spend our lives floating through them, forever experiencing one midpoint along the spectrum. But all possible outcomes take place in a single reality which consists of two extremes.

This idea has existed for thousands of years, mainly seen in Eastern Philosophies like Taoism. It’s also the truth Buckles was getting at during my Econ 101 class.

We judge our decisions based on our perception of their two sides. So how do we find the right balance?

The Utility Machine

In our example, you would choose to eat Cheetos for one reason: you think eating them would provide you more satisfaction than not eating them.

Utility is defined as a hypothetical measurement of happiness.* When making a decision, you attempt to allocate your scarce resource (time) in a manner which provides you a maximum amount of contentment (utility).

Thus, every decision you make requires you to weigh the two sides of it. A correct choice is one which provides the most units of pleasure after subtracting the amount of displeasure you will have to endure.

This type of reasoning is also used in ethical inquiry. Namely, utilitarianism is a theory which holds that moral actions are ones which produce the most total utility in society. Jeremy Bentham and John Stuart Mill refined this approach most completely, but the idea can be seen as far back as Aristotle. While utilitarianism isn’t a perfect approach to morality, it is largely consistent with the way we actually make decisions.

The obvious conclusion of these arguments is that all of our choices are derived from our feelings. If something makes us feel more good than bad, we call it the correct choice, the moral choice, etc. But what is the origin of our feelings?

From all that we can tell, they’re completely random.

For instance, think of what gives you the most pleasure in life. Most of us tend to prefer things like sex, money, a good meal and time spent with family. The common theme behind these – they promote the survival of yourself and the species.

Sex helps create more humans. A good meal provides you with energy. Keeping close to your family gives you a sense of security, as does money.

Yet the only reason these things feel good to you now is because the people who liked them in the past are the ones who reproduced. If you don’t feel inclined to seek sex, food or security, you’re less likely to pass down your genes to the next generation.

Thus, the basis of utility is completely subjective. What we perceive to be good and bad are solely the elements which aid life’s survival. If an action doesn’t promote that end (i.e. murder, thievery, greed) it makes us feel really bad, and we label it evil.

But in reality, it’s all a part of the same coin. None of our choices are inherently right or wrong outside of the way we feel about them.

So, Heads or Tails?

In summary, two sides exist to everything. Whichever one we prefer is subject to a random process no one controls.

This might seem a little hopeless at first, especially when society at large conditions us to believe the opposite. However, recognizing the two sides to every coin is a key feature in making better decisions and becoming a more empathetic human.

When you accept this truth, you realize every one is doing their best given their circumstances.

Some people are Fundamentalist Christians. Some are Transgendered Nihilists. Each of them are making the choices they think are best given their perception of reality.

We all have our own utility machine, and we use it to take actions we believe produce the most total goodness for ourselves and others. Recognizing this fact separates you from your ego a bit and creates more sympathy for every facet of the human struggle.

Further, it also inclines you to reject the dogmatism of any single group. Be it Islam, Christianity, Feminism or Cross Fit, any declaration of “this-is-totally-right-and-this-is-totally-wrong” will raise a red flag, because that person is marginalizing the reality of the other side. As Buckles would say, they are either ignoring the benefits or the costs.

Finally, accepting the two sides to every coin can help you make better decisions in your own life.

You may be feeling unsure about your career path, dating choices or general life purpose. However, most of these uncertainties exist because your parents, friends or culture tell you there’s something you should be doing.

But in reality, there are no shoulds outside of the ones you choose to hold. You are the sole judge of what brings you utility, and your mission in life is to maximize the amount of it you bring to yourself and others.

If the benefits of the decision outweigh the costs, you should do it.

*This definition fell out of style during much of the 20th century, but with the advent of behavioral economics it's starting to make a comeback. Read more about the distinction here.